Nearly $11M for cheese procurement to support USG food donations, awarded to Masters Gallery Foods

Contract Overview

Contract Amount: $10,819,059 ($10.8M)

Contractor: Masters Gallery Foods, Incorporated

Awarding Agency: Department of Agriculture

Start Date: 2024-08-13

End Date: 2025-03-31

Contract Duration: 230 days

Daily Burn Rate: $47.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010263/4100030725/CHEESE CHED YEL CHUNKS-PKG 12/2 LB,CHEESE CHED YEL SHRED-PKG 12/1 LB,CHEESE CHED YEL CHUNKS-PKG 12/1 LB,CHEESE CHED YEL SHRED-PKG 6/2 LB

Place of Performance

Location: OOSTBURG, SHEBOYGAN County, WISCONSIN, 53070

State: Wisconsin Government Spending

Plain-Language Summary

Department of Agriculture obligated $10.8 million to MASTERS GALLERY FOODS, INCORPORATED for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010263/4100030725/CHEESE CHED YEL CHUNKS-PKG 12/2 LB,CHEESE CHED YEL SHRED-PKG 12/1 LB,CHEESE CHED YEL CHUNKS-PKG 12/1 LB,CHEESE CHED YEL SHRED-PKG 6/2 LB Key points: 1. The contract focuses on essential dairy products for food donation programs, highlighting the government's role in food security. 2. A firm-fixed-price structure suggests predictable costs for the government, though it may limit flexibility if market prices fluctuate significantly. 3. The award to a single entity, Masters Gallery Foods, warrants scrutiny regarding potential price advantages or limitations in supplier diversity. 4. The contract duration of approximately 7.5 months indicates a short-term need for these specific commodities. 5. The procurement falls under the 'Cheese Manufacturing' industry, suggesting a specialized segment of the food supply chain is being utilized.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the type and quantity of cheese procured. However, the total award amount of approximately $10.8 million for a 7.5-month period for food donation commodities suggests a significant investment in supporting food assistance programs. Further analysis would require comparing unit prices for specific cheese types against market rates and similar government procurements to determine if the pricing represents good value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 7 bids suggests a reasonably competitive environment for this specific procurement. The level of competition is a positive sign for price discovery and potentially achieving favorable pricing for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where vendors strive to offer competitive prices to win contracts, potentially leading to cost savings.

Public Impact

Beneficiaries include individuals and families receiving food assistance through US government donation programs. The services delivered involve the procurement and supply of essential dairy products, specifically cheddar cheese in various forms. The geographic impact is likely national, as donated food commodities are distributed across the United States. Workforce implications are primarily within the food manufacturing and distribution sectors, supporting jobs related to cheese production and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations not captured by firm-fixed-price if market conditions change rapidly.
Limited visibility into the specific types and quality of cheese procured without further detail.
Reliance on a single awardee may limit future competition or supplier innovation.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm-fixed-price contract provides cost certainty for the government.
Supports critical USG food donation programs, addressing food security needs.

Sector Analysis

This contract falls within the broader food manufacturing and distribution sector, specifically focusing on dairy products. The market for cheese production in the U.S. is substantial, with various players ranging from large corporations to smaller artisanal producers. Government procurements for food donations represent a consistent, albeit specialized, segment of this market, often requiring specific product formulations or packaging to meet program requirements. Benchmarking this spending would involve comparing it to other large-scale food commodity contracts for donation or relief efforts.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. The award to Masters Gallery Foods, a single entity, suggests that small businesses may not have been primary awardees for this specific large-scale procurement. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Agricultural Marketing Service (AMS) within the Department of Agriculture. Accountability measures are inherent in the contract terms, including delivery schedules and product specifications. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USDA Food Purchase Programs
Commodity Supplemental Food Program
The Emergency Food Assistance Program (TEFAP)
National School Lunch Program (NSLP) - Food Purchases

Risk Flags

Potential price risk due to firm-fixed-price structure if market prices decline.
Limited visibility into specific product quality and specifications without further detail.
Reliance on a single awardee may limit future competitive opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $10.8 million to MASTERS GALLERY FOODS, INCORPORATED. COMMODITIES FOR USG FOOD DONATIONS: 2000010263/4100030725/CHEESE CHED YEL CHUNKS-PKG 12/2 LB,CHEESE CHED YEL SHRED-PKG 12/1 LB,CHEESE CHED YEL CHUNKS-PKG 12/1 LB,CHEESE CHED YEL SHRED-PKG 6/2 LB

Who is the contractor on this award?

The obligated recipient is MASTERS GALLERY FOODS, INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Agricultural Marketing Service).

What is the total obligated amount?

The obligated amount is $10.8 million.

What is the period of performance?

Start: 2024-08-13. End: 2025-03-31.

What is the historical spending pattern for cheese procurement by the Department of Agriculture for food donation programs?

Analyzing historical spending for cheese procurement by the USDA for food donation programs requires accessing and aggregating data from previous contract awards. This would involve filtering contract databases for relevant agencies (e.g., Agricultural Marketing Service), contract types (e.g., definitive contracts, purchase orders), and commodity descriptions related to cheese and food donations. Trends in annual spending, average contract values, and the number of awarded contracts over several fiscal years would reveal patterns. For instance, one might observe fluctuations based on appropriations, changes in program needs, or shifts in market prices. Understanding these historical patterns is crucial for budgeting, forecasting future needs, and identifying any significant deviations in current spending levels that might warrant further investigation.

How does the unit price of the cheese procured in this contract compare to market rates for similar products?

To compare the unit price of the cheese procured in this contract to market rates, one would need to identify the specific types of cheese (e.g., cheddar, shredded, chunked) and their packaging (e.g., 12/2 lb packages). Then, research current wholesale or bulk pricing for these specific cheese products from industry reports, commodity market data, or major food distributors. For example, if the contract specifies 2 lb packages of shredded cheddar, the unit price would be calculated by dividing the total contract value allocated to that item by the total number of 2 lb packages. This calculated unit price would then be benchmarked against the researched market rates. Significant deviations, either higher or lower, would prompt further questions about the contract's value for money, potential overpricing, or advantageous bulk purchasing.

What is the track record of Masters Gallery Foods, Inc. in fulfilling government contracts, particularly for food commodities?

Assessing the track record of Masters Gallery Foods, Inc. in fulfilling government contracts involves reviewing their past performance data, if publicly available. This includes examining the number of previous federal contracts awarded to the company, their value, and the timeliness and quality of their performance on those contracts. Databases like the Federal Procurement Data System (FPDS) can provide insights into past awards and performance ratings. A history of successful, on-time deliveries and compliance with contract specifications would indicate reliability. Conversely, a record of contract terminations, disputes, or poor performance ratings would raise concerns about their capacity to fulfill the current award effectively. Understanding their past performance is critical for evaluating the risk associated with this contract.

What are the specific food donation programs that will benefit from this cheese procurement, and what is their typical reach?

The data explicitly states 'COMMODITIES FOR USG FOOD DONATIONS,' indicating the general purpose. To identify the specific programs, one would need to cross-reference this contract with USDA's food purchase and distribution program details. Likely beneficiaries include programs such as the Emergency Food Assistance Program (TEFAP), which provides food to low-income households, and potentially the Commodity Supplemental Food Program (CSFP), which serves specific vulnerable populations like infants, children, and seniors. The reach of these programs is typically national, distributing food through a network of states, territories, and local agencies to reach millions of individuals and families facing food insecurity across the United States.

Given the firm-fixed-price structure, what are the potential risks and benefits for the government regarding price volatility?

A firm-fixed-price (FFP) contract structure offers significant benefits for the government by providing cost certainty. The total price is fixed, meaning the government knows its maximum expenditure upfront, which aids in budgeting and financial planning. This structure shifts the risk of cost overruns to the contractor. However, the primary risk for the government under an FFP contract arises if market prices for the commodities (in this case, cheese) decrease significantly after the contract is awarded. The government would still be obligated to pay the fixed price, potentially paying more than the current market value. Conversely, if market prices increase substantially, the contractor bears the loss, which could incentivize them to cut corners on quality or delivery if not closely monitored. For this specific contract, the relatively short duration (approx. 7.5 months) may mitigate the risk of extreme price volatility compared to longer-term agreements.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1424B0556

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 328 COUNTY ROAD PP, PLYMOUTH, WI, 53073

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,819,059

Exercised Options: $10,819,059

Current Obligation: $10,819,059

Actual Outlays: $10,819,059

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline